New Purchase Mortgage

What Credit Score Do You Need For A Mortgage In Canada?

Before applying for a mortgage in Canada, there are several requirements that you must meet. A solid credit score is one of the most important considerations. But what are the specific qualities of a good credit score?

In any case, numerous mortgage lenders are available today, and each of these lenders adheres to its own set of lending requirements.

When you apply for a mortgage and hope to obtain the best possible interest rates, your credit score might make a substantial difference in your ability to do so. When it comes to mortgages, your chances are better the higher your credit score.

Read this article to get an idea of the minimum credit score needed to apply for a mortgage and some other considerations you will need to make before applying. But before I proceed, allow me to review what an insured mortgage is.

What Exactly Is Insured Mortgage?

An insured mortgage is a mortgage that is backed by financial protection in the form of mortgage default insurance. If you fail to keep up with your mortgage payments and default on your loan, the insurance protects the lender against losses. It does not protect you, the consumer.

A mortgage guaranteed by the Canada Mortgage and Housing Corporation (CMHC) is one in which the borrower makes a down payment of less than 20 percent of the price of the home they are purchasing, with the minimum down payment set at 5 percent.

Mortgage default insurance is a type of insurance that protects the lender if a mortgagor is unable to make their mortgage payments as agreed.

Mortgage default insurance is a heavily regulated sector in Canada, and Canada Guaranty, CMHC, and Genworth Financial are all vying for customers’ business.

Minimum Credit Score Needed For an Insured Mortgage

The CMHC raised the minimum credit score required for insured mortgages from 600 to 680 as of July 1, 2020. Specialists in the field had varying reactions to this massive growth.

Many others felt the new requirement was too stringent and would keep too many Canadians out of the housing market.

One of the mortgage applicants must have a credit score over the CMHC’s minimum requirement of 580. This makes things easier for married borrowers, as just one must have a credit score of 680 or greater.

What Is A Good Credit Score In Canada?

You might be curious about what constitutes a “good” credit score. In Canada, credit scores can range anywhere from 300 to 900, but you will not find many people with scores in the upper or lower echelons of that spectrum. Most people in Canada have credit ratings ranging from 600 to 800.

Credit scores are given in a range of possible outcomes. You can see how the levels are grouped by looking at the following breakdown of each one;

  • A score of 800 or higher indicates excellent performance.
  • A score that falls between 720 and 799 is also excellent.
  • It is considered a good range when your credit score falls between 650 and 719.
  • Fair is regarded to be between 600 and 649.
  • A credit score that is lower than 600 is considered to be a poor score.
  • How to find out what your credit score is.

It is best to verify your credit score and get a copy of your credit report before applying for a mortgage. All of this preparation needs to be made ahead of time. In several ways, you can get your hands on this data without spending a dime.

Obtaining a copy of your credit report requires contacting the credit reporting organization directly. Before we show you how to do it, let us tell you why this is a route we would not recommend taking.

When it comes to the Canadian credit reporting industry, Equifax and TransUnion are head and shoulders above the rest. Both agencies are required by law to offer consumers a free copy of their credit report once per year upon request. Also, they do it, but they do not exactly make it easy.

Both of these services advertise a premium paid version on their websites. This premium service, which includes monthly credit reports and costs around $20, is available to you.

You may get a free copy of your credit report from Equifax by filling out a form that can be found on their website and then mailing or faxing it to the company, along with identification documents.

Each individual is entitled to one free TransUnion credit report in a given calendar year.

What Are Your Options If You Don’t Have a Strong Score?

If you don’t have a strong score, do not worry, you still have many options to explore. Check these out;

Make a Bigger Down Payment

If you have a credit score on the verge of being considered good or bad, increasing the amount of money you put down as a down payment may enhance your chances of acquiring a mortgage.

To avoid paying for mortgage insurance, a down payment of at least 20% of the home’s purchase price is required. However, a more significant down payment will make your application more attractive by reducing the lender’s risk if you can afford it.

Eliminate Your Outstanding Debt

If you have a high income and assets but have used up all of your available credit, your application will be more difficult to approve. This is due to the fact that a high use ratio on revolving credit negatively affects credit scores. ” The ratio of your total debts to your annual income is a major element in determining whether or not you will be granted a mortgage.

Compare Prices

If your credit score is low, getting a mortgage from a large bank is probably out of the question, and you should broaden your search even if going through the numerous different lenders available can be time-consuming. However, you can save yourself the hassle by using us.


Having a high credit score is essential to get approved for a mortgage. Try as much as possible to get your credit score up to at least 680. If it isn’t, it does not automatically mean you will not get the loan, but you probably will not get the best mortgage rates, either.

The good news is that you can take action to boost your credit score and get it closer to where you want it to be, even if it is currently lower than you would like.

Visit our website Best Mortgage Online home page for detail information on Mortgage, Loan, Home Equity, Refinance and more.

Mortgage Renewal/Switch

Advantages Of Early Mortgage Renewal in Canada

Today, many people take advantage of various mortgages to acquire their dream houses, even when they do not have enough funds. A mortgage is simply a form of loan received by a person from a lender, often a bank, to purchase a house or property. These loans are paid back over an agreed period, either with a fixed or flexible interest rate. Repayment is either spread out monthly, weekly, or some months time. Mortgage services have made property purchases easy for many Canadians today.

But there are some important details to note in a mortgage. One of those is mortgage renewal. Mortgage renewal is one of the many aspects of mortgages. Some others include mortgage refinancing, equity take-out, and many others. But for mortgage renewal, the main contention is about its benefits and disadvantages. Many people think that renewing your mortgage isn’t as beneficial as professionals portray it to be, because it simply extends your debt to the lender. While some others are ignorant of the benefits of mortgage renewal and thus do not pursue this option available to them.

Therefore, to demystify the notion of mortgage renewal, this article will highlight some advantages of renewing your mortgage early. 

What is Mortgage Renewal?

As the name indicates, mortgage renewal involves the extension or restoration of a mortgage. Mortgage renewal is the process of extending the terms of your loan after the expiration of the current loan with you unable to completely pay off the loan. This means that renewal happens under two conditions: when you are unable to pay off your mortgage at the agreed time and when the current term of your mortgage is up. This happens, especially when you do not have funds to repay your loan, and the best option available to you is to seek a mortgage renewal.

Therefore, mortgage renewal is the act of restoring the mortgage on your house to give you a longer period to pay off your loan. This renewal allows you to renegotiate the mortgage terms, such as the interest rate, payment frequency, and length of the term. In other cases, a mortgage renewal allows you to maintain the same details of your mortgage and simply extend the length of the term.

The Mortgage Renewal Process

The mortgage renewal process is fairly simple. Often, before the end of your mortgage term, if you are unable to pay off your loan in full, your lender sends you a notice that you can renew your mortgage. So, you can either renew your loan for a new term with your current lender, where you can maintain the same loan conditions and rate, or renegotiate new terms and conditions.

You could also search for a new lender to offer you a lower interest rate and a shorter term. This offers you new opportunities with a new lender. But more importantly, it offers more time.

The Pros of Early Mortgage Renewal

In mortgage renewal, the period you renew your mortgage is just as vital as renewing the mortgage itself. There are periods of mortgage renewal, which indicate when a person renews his/her loan. These periods include early and late mortgage renewal.

Early mortgage renewals refer to the process of renewing or extending your loan before your current mortgage term ends. It is done in anticipation of the end of a mortgage term and with the knowledge of ones’ inability to pay off in full before it ends. At the same time, late mortgage renewal refers to when an individual renews his/her loan after the current mortgage term has ended. Each type has its own benefits and disadvantages. But for this discussion, we would focus on early mortgage renewal.

Although the pros of early mortgage renewal vary based on the situation; amount owed, time left, and interest rate. But here are some benefits of renewing your mortgage early.

Renegotiation of Terms

One major advantage of early mortgage renewal is that you have adequate time to carry out your research. Adequate market research allows you to go to the negotiating table full armed with the possibility of having a better outcome.

So, early mortgage renewal allows you to renegotiate your loan terms. Due to proper research, you would know the current rate in the market. You would know if the current market rate is lower or higher than your existing loan interest rate. And if the market rate is low, you can decide to renegotiate a lower rate with your lender while renewing your mortgage even before your current term ends.

Changing Lenders

Early mortgage renewal also allows you to change lenders effectively. Often when you want to renew your mortgage, it is advisable to scout for other lenders with good interest rates. Rates that are lower than that which your current lender offers you. Sometimes, you might not end up using these other lenders, but it gives you a negotiating power at the table with your current lenders if they want to retain you as a client.

Proper research when you plan for early mortgage renewal offers you the opportunity to meet other lenders, scout, and make the best choice for your renewed mortgage. This choice can significantly affect your ability to pay off these loans during the loan term and the rates you get.

Lock-In Rates

With early renewal, you have the opportunity to lock in rates. This means that there might be a sentiment or rumour in the market that interest rates are about to increase. Renewing your mortgage when rates are high means that you will be paying more than your current mortgage. In this instance, you can lock in rates at a lower price by renewing early.

You lock in your renewed mortgage at a lower rate than the future high rate.


Although some might argue that early mortgage renewal has its disadvantages, we can see from the points stated above that it greatly benefits the individual. Renewing a mortgage is beneficial to individuals who cannot pay off their loan in full. But early renewal accords you more benefits as you have enough time to research and make the right choice for your mortgage.

Hope now you know why early mortgage renewal is good in Canada. Visit our website Best Mortgage Online for any help related to Mortgage, Home Finance in Canada

Home Equity Takeout

Pros and Cons of Equity Takeout

There are numerous debates about the pros and cons of equity takeout. Some are in support of pro-equity takeout, while others are against it. But it would be wrong to pick a side without a proper understanding of the concept of equity takeout and full comprehension of its pros and cons.

Therefore, this article will highlight some of the features of equity takeout while also defining the concept of equity takeout. Then, we will discuss the advantages and disadvantages of equity takeout. Why does borrowing money from your property to finance other activities affect you in a wrong way or a good way? On these and more, we would decide. So, read on and find the answers.

What is Equity Takeout?

It means taking equity out of your house to get funds to finance other expenses. It is the process by which people get loans from equity on their houses or properties to attend to urgent expenses.

These expenses could be unpaid school fees, medical emergencies, debt repayment, unforeseen expenses, or even funds for a vacation or family holiday. This means that different people take out equity in their homes for different reasons, but they all focus on the need for money to fund a certain expense. This means that the application of equity takeout varies based on the individual’s needs.

Also, there are variations in equity takeout. Some have a fixed rate and a fixed sum borrowed, while others have a variable rate and a flexible sum borrowed. For those agreements where the rate is fixed, the interest you pay back on the loan is fixed, and the amount you can get from the equity takeout is fixed, agreed upon at the contract’s start.

For variable rates, the interest rates vary and can be adjusted. While the sum borrowed from equity is not fixed, it is flexible to the needs of the individual and the agreement with the lender. Both variations have their benefits and disadvantages. One helps with organization and a structured form of operation, while the other is unstructured and prone to misuse.

Our focus is not on the pros and cons of both variations but on equity takeout as a whole.

The Pros of Equity Takeout

Some benefits of equity takeout include;

Fixed Interest Rate

For your equity takeout, you enjoy a fixed interest rate. The repayment of a home equity loan is often paid in installments over a period of five to thirty years. The market rate would rise and fall at various intervals throughout this period. But your repayment is not affected because you enjoy a fixed rate on your equity takeout. So, no matter the rise in interest rates you pay the same as agreed at the beginning.

Having a fixed interest rate is vital in helping you plan your repayment method. You know the exact amount that needs to be paid with interest and can adequately budget your finances to pay it off at the required time fully.

Multiple Usage

Another benefit of equity takeout is that it has multiple use cases, which simply means that you can use it for anything that you want. You can take out equity to repay a debt, but after getting the loan, you may then receive an unexpected sum of money that could help you clear the debt.

You can use the money gotten through this means to repay debts, open a business, for investment, for a vacation, for fees, anything you want. It is not restricted in any way.

Repayment Plan

Home equity loans also give you enough time to repay the loan. The repayment term could last as long as twenty years at a fixed rate. This means that you can effectively plan your finances to fully pay off when due.

Relatively Low Rates

Apart from getting a fixed rate from a home equity loan, you also get lower rates than unsecured loans. What this means is that since the loan is coming off of the equity on your property, the interest rate is often lower than other means by which you may get a loan, such as personal loans, and bank loans.

The Cons of Equity Takeout

There are some cons to using equity takeout, which dissuade some people from using this means of borrowing. It is vital that you duly consider all these drawbacks before engaging in the process of equity takeout. These drawbacks vary, but some include;

Possibility of Losing Your Home

Bear in mind that you are placing your house up as collateral to collect a loan. This means that failure to repay the loan could lead to foreclosure of your house by the lender. So, know that there is a risk of losing your home before you apply for equity takeout.

Higher Interest Rate

Since interest rates for equity takeout are fixed, institutions often make the agreed rate higher than what you might get from a home equity line of credit. The best interest rates are offered to clients with great credits. So, you need a high credit score to get low rates.

Closing Costs

In an instance, where you want to end the contract and close the loan before the end of the term, you would need to pay a closing cost. These closing fees account for about 2-5% of the loan amount. This means that you cannot simply close the loan without a penalty or closing cost despite your financial state.

Substantial Equity

Remember, that equity takeout is you simply borrowing by exchanging equity on your house for money. To do this, it is often required that you have equity in your house of about 15-20%.


Equity takeout isn’t a decision that one should rush into. You need to carefully evaluate its pros and cons, and analyze your borrowing options. This is because if you have not fully paid off your first mortgage, equity takeout would simply become a second mortgage for you and you would have to handle paying off two mortgages with the same disposable income.

Hope after reading this article your doubts get clear about home equity. Browse our website Best Mortgage Online for more information on Home Refinance, Debt Consolidation, Mortgage and more.

Mortgage Renewal/Switch

Mortgage Renewal Process in Canada

When buying a house, you usually sign a mortgage with a 15 to 35-year amortization. But throughout that time, the lender can break your mortgage into terms that last anywhere from 6 to 120 months. The mortgage is broken up into 24- to 60-month terms in most cases.

So, when you renew your mortgage, it usually means that you are signing a new agreement with the lender for a term equal to all or part of what is left on your previous agreement. The renewal cost will depend on current lending rates at the time.

The Mortgage Renewal Strategy in Canada

There are two things that any serious homeowner should do before the end of their mortgage term:

  1. shop around for a new lender or
  2. have a renewal strategy.

While you might think that renewing your mortgage automatically means going with the same lender, there are some great reasons to take advantage of other lending options open to you.

Mortgage Renewal in Canada: Step By Step

Remember, if you don’t shop around for the best mortgage renewal rates available to you, you’re leaving money on the table. So here’s what to do:

Step 1. Start Preparing on Time

Think about how much you can realistically afford and decide on a budget. Remember that your lender will most likely require you to qualify for the new mortgage at a higher interest rate than what you paid on your last term.

Gather all of your financial documents, including the latest payslip, bank account statements, a notice of assessment from the Canada Revenue Agency, etc. Make sure to provide your financial institution with a copy of this information if they request it. You may also be asked to provide proof of employment or other income sources.

Contact a lender and tell them you’d like to get pre-approved for a mortgage renewal. They’ll give you a rate and a pre-approval code that you can pass on to the seller of your house. The seller may then write into the offer that they will accept your renewal application, provided you meet all other conditions for buying a property (price, financing).

Step 2. Choose to Renew or Break Your Mortgage Term Early

When you get a mortgage renewal letter from your bank, it will show your current interest rate next to the new rate you will have if you renew. It’s very tempting to say “OK” and avoid all the confusing fine print. But by doing so, you’re only agreeing to sign another mortgage term with your current lender – which means locking yourself into paying that new rate for the next 20-25 years! That is unless you choose to break your mortgage or renew it early.

The pre-authorized cancellation form is the only way to terminate your mortgage without penalty. It lets your lender know that you’re ready to end your current agreement. The benefit of using this method is that you will be able to shop around for the best new rates and terms from other lenders when you do break it.

Step 3. Know You Renewal Options

Before you renew your mortgage, you need to know what kind of mortgage product would suit you best. Knowing the options might help you become mortgage-free sooner than you thought. Here are some of the essential options and terms you should know:

  • Fixed-Rate Mortgage: Your interest rate stays the same during the loan term. You will need to refinance at the end of the term unless you want to renew your fixed-rate mortgage.
  • Variable-Rate Mortgage: A floating-rate mortgage is also tied to prime lending rates and can change anytime. If interest rates go down, your payments may decline accordingly.
  • Principal and Interest Payment Mortgages: This kind of mortgage has you paying off your principal (the actual loan amount) and financing charges each month for the term.
  • Interest Only Mortgage: You only pay off just finance charges by making monthly payments that don’t cover any part of your principal balance or total interest due during the term.
  • Line-of-Credit Mortgages: A particular type of variable rate mortgage attached to a separate line of credit. It’s great for those who need the flexibility to borrow from their own home during the mortgage term without being charged extra fees or penalties. The interest you pay on this loan changes along with prime lending rates.

Step 5. Remember: It’s OK to Walk Away From Your Mortgage Term

If you’re not happy with any offers from your current lender or another one, don’t just sign anything right away. Instead, consider whether or not renewing is even in your best interests at all. Think carefully about how long you plan on staying in the home before you sign on again – and whether or not finding a better rate than what is being offered might make more financial sense in the long run.

If you do decide not to renew your mortgage, make sure to get out of it properly by either filling out a pre-authorized cancellation form or breaking your term early with no penalty before its time is up. If you don’t, then you could find yourself stuck paying an interest rate that’s higher than what other lenders are offering elsewhere. Also, remember that while mortgages may come with terms designed to protect lenders from customers defaulting on their loans, they’re also meant to help homeowners achieve their financial goals.

The Bottom Line

Your mortgage renewal date is an important day – and it’s your chance to switch your existing loan to a new plan that better suits you. In most cases, the first thing you need to do before even thinking about renewing is to make sure that you’re as satisfied as possible with the product and service being offered by your current lender.

If no other bank can offer a better deal, then don’t be afraid of sticking with what you have if it means keeping monthly payments manageable for both yourself and your family. But whatever you do, make sure not to ignore this crucial step in the mortgage process! It can help ensure that getting rid of your home won’t become more costly than it needs to be later on down the road – especially since most Canadians don’t know when they’ll finally be done with their mortgage.

Hope now you know the process of Mortgage Renewal in Canada. For more information on Mortgage, Refinance, Rates, Home equity visit our website Best Mortgage Online

Mortgage Refinance

Canadian Mortgage for Non-Residents

The Canadian housing market continues to be very strong, and its robust economy shows no sign of slowing. In addition, according to the U.S. News, Canada is considered the most livable country globally.

This environment makes owning a home in Canada an attractive prospect for many people, particularly those living outside Canada. Today, we will see some of the most frequently asked questions about buying a home as a non-resident in this beautiful country.

Understanding Mortgages for Non-Canadian Residents

A non-resident of Canada is generally classified as not having permanent status. For example, they may be a citizen of another country living full or part-time outside of Canada, or they may have dual citizenship that includes another country in addition to Canada.

Although there are several benefits to buying property in Canada, you must understand and abide by all Canadian laws regarding foreign ownership if you choose to go ahead with this project. For example, suppose you fail to meet your legal obligations when buying, owning, and selling real estate as a non-resident in Canada. In that case, it can have very negative consequences, including financial penalties and even imprisonment under certain circumstances.

As such, experts recommend consulting an immigration lawyer before making any decisions about property ownership here.

Required Documentation for Buying Property as a Non-Resident

When buying property in Canada as a non-resident, you will need to provide proof of your financial status. However, that may be more difficult if you live outside of Canada for an extended period or you change jobs. You will also need to show that you have access to funds when applying for a mortgage.

In addition to this documentation, you should obtain a pre-approval from a Canadian bank before looking at any properties so that your realtor knows exactly how much they can help you spend when searching for homes. Pre-approvals are usually valid from 60 days up to 120 days, depending on the lender, and it provides clients with a clear idea of how much money they can spend without the additional stress of applying for a mortgage.

Once a property is found, you will need to provide proof that you live outside of Canada, along with your financial documentation and pre-approval letter from a Canadian bank.

Other essential documents include:

  • Proof of citizenship
  • A list of reference people who are either citizens or permanent residents in Canada
  • References from friends or family members who are Canadian residents but not citizens
  • The broker must fill out a property information form

Qualifying for a Mortgage as a Non-permanent Canadian Resident

Even if you are not a permanent resident of Canada, there is no reason that you cannot have a high income and still qualify for a mortgage. The only difference is that your down payment may need 30% or more rather than the 5% that citizens typically need.

Keep in mind that interest rates on mortgages in Canada will fluctuate. It can be difficult to predict what your monthly payments might total over the loan term with any accuracy. That makes it crucial to remain as flexible as possible when looking at homes so that you can leap on any opportunity should the rate suddenly dip below what it was at the time of pre-approval.

What Kinds of Mortgages are Available for Canadian Non-Residents?

Lending institutions offer both closed and open mortgages to non-residents. Closed mortgages have regular payment schedules and regular amortization periods and are paid in full at the end of the term. However, they cannot be pre-paid or refinanced once you obtain them.

Open mortgages can be used for home improvements or other projects because they involve a line of credit that allows you to pay any fees as desired before closing on your property. In addition, the rates fluctuate with market conditions which means that you will have plenty of options for pre-payment flexibility and interest rate management over time.

Mortgage Interest Rates for Non-Residents

The interest rates for non-resident mortgages tend to be relatively high compared to rates available through The Canada Mortgage Housing Corporation (CHMC). However, they are considered riskier and more challenging to assess.

The following information can help you understand the different types of mortgages and their interest rates and fees:

  • Canadian fixed-rate mortgages: The interest rate on these mortgages will be charged at a fixed percentage throughout the life of the loan. As such, your payments will remain constant through any changes in Canadian currency fluctuation or economic climate. These loans tend to come with higher closing costs than variable-rate mortgages, but you do not have to worry about fluctuations in your monthly payment amounts.”
  • Variable-rate mortgages: These loans provide you with greater flexibility, allowing for increases or decreases in your payments based on market conditions. With this mortgage type, there is a possibility that your monthly payment may be higher than it would be with a fixed-rate loan.
  • ARM mortgages offer rates that change over time, and they are often considered riskier investments for lenders than fixed or variable-rate loans. As such, the interest rates tend to be higher for this type of mortgage.”

Closing Costs for Canadian Non-Resident Mortgages

Lenders tend to charge higher closing costs because non-resident mortgages come with riskier conditions and rates than resident mortgages. Additional fees you may need to pay when taking out a mortgage in Canada include:

  • A valuation fee (varies by lender)
  • An appraisal fee (varies by lender)
  • Legal fees (varies by province)
  • Title insurance (varies by lender)

The Bottom Line

Obtaining a mortgage in Canada is possible, even as a non-resident. However, you should expect higher interest rates and more significant fees than those available to Canadian citizens. The key to ensuring that you can afford your price properties based on the current lending environment so that you do not find yourself with an expensive home that you cannot afford due to fluctuating payments.

If you are non residents of Canada and don’t know about Canadian mortgage, then browse Best Mortgage Online for more knowledge on various mortgage available in Canada.

New Purchase Mortgage

Mortgage Pre-application and Mortgage Pre-qualification

Are you looking to buy a home? What do you know about mortgage applications? Have you been wondering about the differences between mortgage pre-approval and mortgage pre-qualification?

A mortgage is a loan used to secure a home, and In Canada, most homeowners obtain a mortgage to get their home.

Once you understand mortgage basics, you will see and understand the differences between mortgage pre-approval and mortgage pre-qualification.

Mortgage Application

To choose a mortgage, you must familiarize yourself with the various types of mortgages and choose the best one for you. When choosing a mortgage, you’ll need to consider several factors. The most important is having an accurate idea of your monthly costs.

This will entail repaying the “principal” loan and making interest payments. In addition, if you can’t make a 20% down payment on a home, you will be required to pay for private mortgage insurance (PMI)

Before you can apply for any mortgage, you need to assess if you can afford it or not. It would help if you got a clear idea of the whole thing before going into it. Securing a home through a mortgage is easy if you understand how it works.

Suppose you want to apply for a mortgage, you must consider the down-payment closing costs, such as lawyer fees and real estate commissions. Also, it would be best if you considered maintenance costs, and monthly home-related expenses such as mortgage payments, home insurance, property taxes, utilities, etc.

 It would help if you also took note of your current debts, such as car loans or student loans, and finally, you must check your spending habits too. Once you look into these things, you will easily apply for a mortgage.

When applying for a mortgage in Canada, certain documents will be required before you get the mortgage. They are a

  • Letter of employment
  • current tax returns
  • an assessment notice
  • bank statements
  • paystubs,
  • assets and liabilities statement
  • purchase agreement and Sale
  • Photo identification.

You must note that the mortgage application will include primary and personal information. For instance, name, address, phone number, social security number, employer, income, etc.

The application will also require your assets, such as mutual funds and RRSPs. It will also include liabilities, such as credit cards and credit lines, and loans. Also included is the purpose of the loan, the mortgage loan amount required, the type of mortgage loan you want, the mortgage term, amortization, and interest.

 In addition, it requires a description of the property you want to buy or already own.

Mortgage Application Process

There are two basic steps to mortgage application: pre-approval and pre-qualification.

Mortgage Pre-approval

A pre-approval document states the maximum amount of money that your mortgage lender is willing to lend you. When looking for a home, a pre-approval document is extremely useful. It indicates that you are a serious buyer prepared to act quickly on a property when you find one you like.

 A mortgage pre-approval prepares you for a stress-free home-buying experience. You can approach mortgage lenders for pre-approval once you’ve decided on the type of mortgage you want.

Pre-approvals don’t take long. They entail obtaining a three-bureau credit report called a tri-merge, and this shows your credit score and history as reported by third-party, reputable institutions. A lender can examine your credit report to see your payment history and your past and present credit lines.

Your lender will determine the loan amount for which you are eligible. Pre-approval saves you a lot of time because it will allow you to focus solely on houses in your price range. Because the seller has solid evidence, you’re qualified for a loan to purchase the home, having a pre-approval document gives your offer a lot of leverage.

Pre-approval is as comparable to validating your credit worthiness as you can get without a sales agreement. You will supply certain information to the lender, and the lender will verify the information you supply. They will also run a credit check. If you’re pre-approved, you’ll get a pre-approval letter, which is an offer (but not a commitment) to lend you a certain sum for 90 days.

Mortgage Pre-qualification

Pre-qualification is now a crucial step when you want to buy a home. Once you pre-qualify for a home loan, you’re getting an estimate of how much you might be able to acquire based on the financial information you supply as well as a credit check.

Pre-qualification is the process by which lenders determine whether you meet the basic financial criteria for a home loan. Pre-qualification is also a chance to learn about various mortgage options and collaborate with your lender to find the best fit for your goals and priorities.

To get pre-qualified, you provide a lender with some basic information about your credit, debt, income, and assets, and the lender determines how much you may be able to borrow. The keyword here is “tell.” Because the information used for pre-qualification is self-reported, the lender does not typically verify it or look at your credit report.

Mortgage lenders will consider your credit profile, annual income, expected loan term and interest rate, monthly debt payments, and potential home-related expenses to determine how much mortgage you’ll be able to pre-qualify for.

Mortgage Pre-qualification is a process that is quick and fast. It is a non-binding, informal evaluation, and as such, you can be pre-qualified in a day or two, sometimes even less. Pre-qualification may occur in person, over the phone, or online, depending on the lender.

Differences Between Mortgage Pre-approval and Mortgage Pre-qualification

There is a distinction to be made between pre-qualification and pre-approval. Pre-qualification entails providing your lender with verbal or written estimates of your income and assets, who may or may not check your credit.

 Mortgage pre-approval means that the lender has confirmed your financial information and issued a pre-approval letter to show sellers and agents that you are authorized, subject only to identifying the house’s value and condition.

Also, pre-approval makes you ready to make an offer confidently and gain a competitive advantage. However, you can start house-hunting knowing how much you might be able to borrow under pre-qualification. Pre-qualification answer questions for this process, plus a credit check while providing proof of financial details, plus a credit check.


People use the two terms as if they are the same. But there are significant distinctions that every home buyer should be aware of, and we have discussed them in this post. Once you know the differences, you know what to opt for.

Take Best Mortgage Online experts advice for mortgage Pre-application and Mortgage Pre-qualification. We help you in buying your new home.

Company Review

Royal Bank of Canada (RBC) : Review

Royal Bank of Canada, or RBC, is one of the biggest banks in Canada and operates multi-nationally under the RBC brand. The bank has branches in Canada, the USA, and the Caribbean, and its services are accessible internationally. The company is committed to providing top-notch financial services to all of its customers and providing aid for communities. Their financial services include personal and commercial banking, insurance, mortgage services, wealth management, investments, etc. In this article, we will be looking into their mortgage services, such as RBC mortgage rate, RBC mortgage affordability, and more.

Mortgage Offers at RBC

Royal Bank of Canada offers a variety of mortgage services so that all of its customers can find exactly what they need with the bank. RBC offers a variety of options for customers to decide on the best mortgage types, interest rates, amortization periods, etc.

First Time Home Buyer

RBC recognizes the gravity of the decision and provides services that help customers through every step of buying a new home and securing a mortgage on it with various tools.

The RBC Affordability Calculator helps customers determine how much they can afford to pay for a mortgage. Customers can then use the RBC True House Affordability tool to pre-qualify for a mortgage. RBC also offers budgeting advice and mortgage education for first-time home buyers and gives customers tips and resources regarding home planning and their tax benefits as first-time home buyers.

With RBC’s Neighborhood Explorer tool, you can find the ideal neighborhood for all of your needs. You can search for institutions in the vicinity, such as schools and restaurants, and have a good idea of what to expect from the community. RBC also assists customers with making offers for homes before offering them their mortgage options. Customers can rely on RBC to provide sound advice on what sort of professional assistance they may need, the documentation required to make an offer, and help every step of the way to closing day. RBC also offers home insurance services for first-time home-buyers to ensure they get the best from their new homes.

Experienced Home Buyers

For customers looking to move into new homes, RBC provides assistance, advice, and a variety of mortgage choices. The RBC website offers resources for customers who want to sell their present homes to purchase new ones. Their Home Value Estimator tool helps customers determine the value of their home before putting it on the market. They also offer advice relating to pricing and help customers get personalized calculations for their home prices, as well as how much equity they could get.

RBC offers customers an insight into the housing market so they can sell and buy homes with ease. They also provide assistance and support for customers who want to build their own homes with tips from builders. When customers choose what home to buy, RBC helps them get pre-approved for mortgages. Customers can find the RBC mortgage interest rate that suits them best from RBC’s options of both fixed and variable rates.

Home Renovations

RBC has options for customers who want to renovate and need financial assistance for the project. Their renovation financing services are dependent on the type and cost of renovations that customers wish to undertake. Their services can be divided into whether your renovation is a large project, medium project, or small project. For each of these, there are a few options for financing that a customer may choose from. The full details of the options for renovation can be found on RBC’s official website.

Buying Investment Properties

RBC offers Investment Property Mortgages that can finance up to 80% of your rental property’s appraisal value. RBC has specific requirements for customers looking to secure an Investment Property Mortgage. These services extend to people who want to convert their homes to rental properties, acquire rental portfolios to build an income, or purchase properties for family members to live on.

RBC will require some documentation from you if you want to apply for an Investment Property Mortgage, as well as a down payment of at least 20%, good credit history, rental income, and sufficient non-rental income.

Buying Vacation Properties

The RBC Vacation Home Mortgage offers financing options for people who want to buy a second home or a vacation home. The Vacation Home Mortgage provides financing for up to 95% of your vacation home price and is the first mortgage solution in Canada to offer that much funding. You can choose an RBC variable rate mortgage or a fixed mortgage for your second home, depending on your financial capabilities.

Mortgage Renewal

Once your mortgage has reached the end of its term, RBC mortgage renewal services are available to assist with the renewal process. You can use their mortgage calculator to understand what your new mortgage rates may look like or take advantage of the 120-day early renewal option to renew your mortgage with no penalties. RBC provides customers with expert advice during the renewal process as they review their finances and mortgage options. They also offer a 30-day renewal rate guarantee that provides customers with the best interest rates during their renewal.

Mortgage Refinancing

RBC mortgage refinancing helps customers find better mortgage deals to reduce their payments, find lower interest rates, consolidate debts, and more. With a mortgage refinance from RBC, you can access your home equity if you need extra cash or find a better mortgage deal for your home. When you consider refinancing your mortgage, there will be some fees involved that RBC will inform you of. You will also get expert advice on the benefits and risks of mortgage refinancing and a detailed guide on how to go about refinancing your mortgage and what mortgage plans are available to you.

Switching to RBC

For customers that want to switch from other banks to RBC for mortgage services, RBC offers a range of benefits and assisting tools. Switching to RBC is an easy process because RBC does the work for you. RBC helps customers by communicating with their previous lenders to arrange the switch. They also cover the switching fees and offer flexible payments for new customers who have just made the switch. RBC Mortgage Experts are accessible by phone or video to provide advice and guidance throughout the switching process.

RBC Mortgage Rates

RBC’s most popular mortgage rates for both fixed and variable are as follows:

2-year fixed – 3.9%

5-year fixed – 4.62%

5-year variable – 2.83%

The RBC Prime Rate is 3.2%

For RBC’s special, posted, and limited-time offer rates, you can visit their website.


RBC offers a wide range of mortgage services for their customers, no matter their needs. If you are interested in securing a mortgage with RBC, you will find the best deals. RBC also offers advice, tips, and professional assistance for your home-owning needs.

Frequently Asked Questions

How Can I Pay Off My Mortgage Faster With RBC?

RBC offers options for customers who want to pay their mortgage quicker. These options include increasing the payment frequency or amount, double-up payments, etc. You can discuss this with an RBC mortgage professional for your choices.

How Do I Know RBC Is Offering Me The Best Mortgage Rates?

At RBC, they take off a client loyalty discount from your prime rate to determine your interest rate. RBC also ensures that your interest rate reflects your mortgage term meaning that lower terms have lower interest rates and vice versa.

Can I Renew My Mortgage Online?

Some mortgage services with RBC may require you to visit physical branches, but many services, mortgage renewal services included, can be carried out entirely online.

Best Mortgage Online is one stop solution for all your queries related to Mortgage, Refinance, Home Equity, New Home Buyer and more.

Home Equity Takeout

How to Use Home Equity for Cash the Right Way

As interest rates fall and home prices rise, people with equity in their homes often think about using this wealth to take cash out of the house. That is commonly known as “taking money out of your house” or “cash-out refinancing.”

The interest rates are at historic lows. The cost of borrowing on a home equity line has never been cheaper, so why not take advantage of it? But this is often the wrong move.  

Instead, it would help to use your home equity to borrow less, not more. If you have a mortgage on your home, consider making extra payments to pay it down faster and save thousands of dollars in future interest costs.

Do I Have Home Equity?

Home equity is the difference between what your home is worth and how much you owe on it. Homes in Canada are often substantial investments. Consequently, this can mean a substantial amount of money in your pocket.

For instance, if you bought a house for $250,000 five years ago, but its market value has increased to $275,000 due to rising house prices, your home equity is $25,000. That’s all the money you have in the bank if you sold your home or paid off your mortgage.

What Happens When You Take Cash Out of Your House?

How to Pay Off Your Mortgage Faster

When you cash out part of your equity by refinancing your mortgage, you take a loan against it. The line of credit that you get access to at your bank is equal to 80% of the amount they approve. So if you need $10,000, you should expect them to give you a line for up to $8,000 maximum. And this line also carries an interest rate based on prime minus 0.15%.

Let’s say prime is currently 3.75%, and your home equity line is at prime minus 0.15%, or 2.65%. So if you take a $10,000 loan from the bank, they will charge you interest on this money of about $23 per month for two years.  

If you use home equity to get cash out of your house, you have to earn more than $30,000 within two years to break even! Every dollar below that is pure profit for the bank.  

But wait a second, why would someone want to borrow on their home equity so expensively when they could go to their local bank and get a personal line of credit for 9% fixed interest? The biggest reason is that the bank won’t give them as much credit.

Home Equity Loans vs. Personal Loans

The bank wants to protect itself from the risk that you’ll stop paying them back, so they give you a loan based on 80% of your home equity. That is because if you stop making payments, then the bank forecloses and takes ownership of your house.

If this happens, your line of credit will be gone because they have seized it for repayment and everything else in the house.  

So while that 9% line is cheaper than taking out money against home equity, it’s still expensive compared to personal loans. The best way to use home equity is not as cash-out financing but instead as a second mortgage to increase your monthly income.  

Second Mortgage vs.Taking Out Cash

A second mortgage means that you agree to borrow against your home’s equity but with no immediate plans to use the money for any specific purpose. Instead, it gives you access to extra cash whenever you need it.  

If you want to take out $10,000 in cash from your home equity line, then you can get it right away. But this means that you will be charged interest every month until the two years are up to when the loan matures. 

Instead of doing this, you can use a second mortgage to access extra cash in amounts that suit your needs. That leaves you with more flexibility because you don’t have an arbitrary repayment schedule imposed by the bank.  

Advantages of Home Equity Loans

Home equity loans aren’t just for taking out $10,000 cash against your home. They’re also great for getting approved for high amounts of credit at low-interest rates, so you can take out lots of extra cash whenever you want.  

The second mortgage is paid back according to the same terms as your primary personal loan. That’s why it’s not uncommon to find yourself with much higher limits than usual on this kind of financing. Having an additional line like that allows you to keep more money in reserve if you need it down the road.

Two ways having an open home equity line has certain advantages, including:  

  • Your home is an asset, which means you can use equity finance renovations. That way, you can increase the value of your home and sell it later when you need cash.
  • If you have an open line of credit, then it’s the cheapest way to borrow large amounts that suit your needs right now.  
  • No one can predict when they’ll lose their job or fall ill, so it’s essential to be prepared for the possibility of needing lots of cash at once. What separates home equity loans from other forms of finance because they are designed for this kind.  

Use Home Equity Carefully

Having a home equity line of credit is what many people use to borrow cash when they want it right away. But doing the same with a second mortgage won’t save you any money, so you should only use this method when you are confident that the extra banked interest will benefit you over time. Because there’s no penalty for taking out money whenever it suits your needs, getting an open second mortgage can be an easy way to increase your income while protecting yourself against emergencies.  

Call Best Mortgage online experts for any help related to home equity, mortgage and refinance. For Mortgage insurance you can visit Insurance Direct Canada

Commercial Mortgage

Commercial Mortgage Rates Guide 2022

A commercial mortgage is a mortgage taken out on a property that is to be used for commercial purposes and not personal or residential. Commercial purposes include businesses, corporations, partnerships, etc. In commercial mortgages, the commercial property serves as collateral for the duration of the loan. The loan is paid back over an agreed period in installments.

Acquiring and paying off commercial mortgages can require a slightly more complicated process than traditional mortgages. Commercial mortgages also come with a different set of risks than traditional mortgages. That is why a comprehensive understanding of commercial mortgages is important before applying for one.

Features of Commercial Mortgages

There are several types of commercial mortgages that a business can apply for, depending on the mortgage lender, down payment, and many other factors. Across all types of commercial mortgages, some critical features remain relevant. These include:

Interest Rates

These can be fixed, variable, or combined. Interest rates are usually presented as a percentage of the initial loan price.

Mortgage Term

Also known as the amortization period, this refers to the amount of time stipulated for the loan to be paid back. An average commercial mortgage can have an amortization period of 1-25 years.

Loan-to-Value Ratio

This is a percentage that shows the ratio of the loan amount to the market value of the property being mortgaged. Lenders use this value as a determiner for the amount of risk they would be taking on by approving a loan.

Differences Between Commercial and Residential Mortgages

Residential mortgages are the more popular type of loan among the two. Customers familiar with residential loans may feel like there is little to no difference between residential and commercial mortgages but this is not true. Some key differences include:

Down Payment

On average, commercial mortgages often require larger down payments than residential. Where a residential property loan may require a down payment of up to 25%, industrial properties may require up to a 35% down payment.


The requirements for residential loans include personal income, expenses, and credit scores. For commercial loans, the requirements are more specific and may be determined by the property that is being mortgaged.

Interest Rates

Most commercial mortgages require higher interest rates as commercial properties often have higher values than residential ones. This incurs more risk for the lender. The interest rate may also increase due to the revenue being made by the business or its credit score.


Besides the down payment and interest rates, commercial mortgages cost more than residential due to processing costs. These processing costs are higher because commercial mortgages require more paperwork and time, documents like environmental reports and property appraisals cost more.


Commercial mortgages typically require longer processing times than residential mortgages. Where a residential mortgage can take as little as four weeks to be approved and closed, a commercial mortgage could take anywhere from a month to a year.

Requirements for Commercial Mortgages

There are certain criteria that a business must pass before being approved for a commercial mortgage. Some of these requirements are explained below.

Business Profitability

The business that is applying for the loan must present a feasible and profitable business plan for its operations. A business that does not seem profitable is not likely to be considered for a mortgage. Lenders have to ensure that the business will make enough income to cover pay back the loan.

Debt Service Coverage Ratio

The DSCR is a figure that determines how much of a given income is available for the payment of debts. Lenders use this figure to ensure that borrowers always have enough income to pay off their loans.

Credit History

Lenders also take note of the credit history of a business when considering it for a loan. Good credit history is a requirement for a commercial loan. The business must have little to no unpaid debt as well. In some cases, the business owner’s personal credit score may also come into play.

Income History

When applying for a commercial loan, lenders require that a business have proof of consistent liquid profit and not equity. The lender may even require that your business have a certain minimum net worth.

Application Process for a Commercial Mortgage

Different lenders may have varying procedures for applying for commercial loans, but most systems should follow these steps.

Analyzing your Finances

Before you can approach any lender, you must take a good review of your business finances to ensure that it is all up to standard. This includes analyzing the profitability of your business, projected growth and revenue, and other factors.

Ascertain your Financial Needs

Proper preparation for a commercial loan application involves finding out what other financial factors may come into play with your loan. This involves answering questions that pertain to the financial running of your business. Such questions include whether the property is to be leased, probable expansion plans, maintenance or renovation budgets, and recurring costs for the running of the property.

Acquire Necessary Documents

When approaching a mortgage lender, certain documents are required of you. It is important to have all of these documents in order. They include:

  • A feasible and detailed business plan
  • Updated financial records for the business
  • Information on the management staff of the business
  • Details on the commercial property to be purchased.

Discuss with Your Lender

Once all of your documentation is ready, the next step is to talk to your lender. Your goal should be to prove to them that you can handle the cost of paying back the loan. Before you bid on a property, you should get the go-ahead from your lender. This involves discussions on the type of commercial mortgage that best suits your business, any other documentation you may need, and more.

Bid on the Property

With the go-ahead from your lender, you can now make a bid on the property of your choice. This is not a decision that should be made lightly so it is important to take as much time as necessary before making an offer on a property. The offer should be made with at least two months to spare before you need to use the property. It gives the lenders time to finalize the loan.


Commercial mortgages are very common, but, because of how much they differ from traditional mortgages, the application process may cause some confusion. It is essential to fully understand all the aspects of a commercial loan before applying for one. This helps to ensure that you get the best property and mortgage deal for your business.

Visit Best Mortgage Online for any type of Mortgage loan and our experts will help you.

Mortgage Refinance

Mortgage Payment Calculator

When it comes to mortgages, there are a lot of factors that go into determining the final sum that you pay each month. It can be advantageous to have a clear idea of how much your mortgage will cost before applying for one. A mortgage payment calculator is an ideal way to calculate the cost of your mortgage before committing to one.

With a mortgage calculator, you can determine your monthly payment for your loan and compare prices with different scenarios depending on down payments, fixed or variable rates, and more.

Why Should You Use a Mortgage Calculator?

The primary purpose of any mortgage calculator is to give people who are interested in taking out a mortgage an idea of the cost. It is not advisable to commit to paying a mortgage without fully understanding what it would cost you. Mortgage calculators are innovative tools that allow you to put down all the variables that make up your final mortgage price and adjust them accordingly, so you can find the best mortgage plan for you.

With a mortgage calculator, you can figure out ways to reduce your mortgage payment by changing some factors. A mortgage calculator is an excellent tool for homeowners that want to know how a mortgage will fit into their budget. Using this tool, you will have a clear idea of just how much you will have to pay each month for your mortgage.

Factors that Affect Mortgage Prices

A few factors affect the final amount that a homeowner pays each month for their mortgage. Adjusting these factors can cause significant changes to the amount of money paid monthly. The home loan calculator takes all of these into account when helping you calculate your mortgage price.

Home amount

This is the asking price of the home you desire to purchase and the amount you require from a bank or lender. Mortgage lenders usually have criteria that determine just how much a person can borrow for their mortgage. This is determined by the homeowner’s total income and expenses.

Down payment

The down payment is an upfront payment made on the home purchase. It is usually a percentage of the total home amount. The amount of down payment a customer can pay determines how much their monthly payment will be. A down payment can range in size, depending on the financial ability of the homeowner, and the mortgage plans provided by the mortgage lender. The higher the down payment, the lower the monthly payments and vice versa.

Loan price

The loan price is the total amount of money a homeowner receives from the mortgage lender. This is calculated as the home amount minus the down payment that has been made and any costs covered by insurance that have been taken away. It is from this price that an interest rate is calculated.

Amortization period

The amortization is the total time it will take to pay off your loan fully. A longer amortization period ultimately results in smaller monthly payments, while a shorter amortization period will lead to higher monthly payments. Longer amortization periods also end up with higher overall interest paid as the payment period is longer. The mortgage payment calculator will help determine the best amortization period for you.

Interest rate


The interest rate is a percentage of the loan price that the homeowner pays each month. The interest rate is the cost of borrowing and represents the profit of the mortgage lender. Most lenders offer either fixed interest rates or variable interest rates to their customers. Fixed interest rates are unchangeable rates that remain the same throughout the payment period. Variable interest rates are adjustable rates that only stay fixed for certain periods. Variable rates are adjusted due to factors such as market conditions.

Variable interest rates are generally believed to result in lower monthly payments than fixed rates. With a mortgage calculator, you can determine what types of rates, down payment amounts, and amortization periods suit you best.

How to Use a Mortgage Payment Calculator

Different mortgage calculators may have different interfaces for how they work. However, no matter what calculator you use, there will be constants.

Firstly, you will have to put in your home price. This works whether you are buying a home for the first time or you already own a home and you’re looking to refinance your mortgage.

The next step is to put in the amount you are willing to pay as a down payment. For mortgage refinances, the down payment field may ask for the amount of equity you own instead. Down payment can be entered as a percentage of the home amount or as a dollar amount.

Once you’ve put in your down payment amount, the calculator may ask for your preferred amortization period next. You can put this in yourself, or the calculator may suggest an amount of time for you. A typical mortgage amortization period may last about 30 years, but you are free to put a different amount, like 20 or 15, into the home loan calculator.

Finally, the calculator will ask for your interest rate. Here, you can put in the interest rate that you feel you will be comfortable paying or the rate you know your lender will request.

With all of this information put in, the calculator will give you new values for interest rate and loan price. These are the best rates that are available to you based on the information you put in. you are free to adjust your down payment amount of amortization period if you want to see alternate results from the calculator.


Mortgage calculators are easy to use and incredibly beneficial for anyone interested in buying a home. With a mortgage payment calculator, you can enter into your mortgage plan with a clear idea of how much your mortgage will cost. Mortgage calculators are free and offer reliable results. Instead of jumping into a mortgage blind, make use of a home loan calculator to get a good idea of the cost.

Get estimate of your monthly mortgage payment with the help of mortgage payment calculator available at Best Mortgage Online website.